On Thursday, the stock price of Conagra is projected to further increase. The company’s strong fiscal third quarter 2023 earnings report triggered the rally.
The maker of Slim Jim meat snacks rose by 1.84% to $38.27 per share on Wednesday. Besides, it is forecasted to rise further by 0.05% in the upcoming session.
On April 05, Conagra revealed that its earnings per share jumped to 76 cents. It is higher than the market forecast of 64 cents. Yet, the latest reading is below the former record of 81 cents.
Furthermore, the firm’s sales revenue ameliorated to $3.10 billion, surpassing the prior result of $3.09 billion. However, this latest reading disappointed the precursory reading of $3.30 billion.
Conagra CEO Sean Connolly attributed these robust gains to price increases. In addition, he said that it aided in offsetting better than expected impact from supply woe concerns.
During the earnings call, executives announced that the entity’s price/mix improved by 15.10%. Inflation-driven pricing actions lifted it.
Yet, the volume plummeted by 9.00% amid higher costs and supply chain issues, including manufacturing disruptions.
Moreover, Conagra said that its gross margin rose by 325 basis points to 27.20%. It is due to price hikes and easing inflation in commodities such as meat and other proteins.
Slim Jim Beef Jerky Maker Raises Full-Year Guidance
In addition, Conagra Brands lifted its full-year profit projection as it bets on price increases to shield its margins. It is due to the weakening demand for frozen products and snacks.
Executives anticipate an EPS of $2.70 to $2.75, up from its prior $2.60 to $2.70 forecasts, surpassing analysts’ estimates.
Besides, the company saw organic net sales growth of 7.00% to 7.50% compared to the previous fiscal year. Also, its operating margin is expected to hit between 15.50% and 15.60%.
Conagra clarified that the root causes behind volume pressures were resolved and expected to rebound.